White House Balks On Farm Loan Deal

`Backstop` Called Bad Approach

November 22, 1985|By Christopher Drew, Chicago Tribune.

WASHINGTON — In its zeal to head off efforts to extend federal aid to the nation`s largest farm lender, the Reagan administration Thursday took the curious step of opposing a bill that would give it sole discretion to rule on the aid request.

Charles O. Sethness, an assistant secretary in the Treasury, said a provision giving the administration the option to provide billions of dollars in aid--or nothing at all--to the Farm Credit System would slow talks on related issues.

He said the administration believes that providing such ``a financial

`backstop` . . . is the wrong approach, at the wrong time, leading to a possible wrong result.``

Sethness` comments irritated a bipartisan group of House Agriculture Committee leaders, who said they had gone out of their way to accommodate the White House in preparing the bill.

In an effort to appease the administration, committee leaders Wednesday dropped language in the bill referring to the possibility of up to $3 billion in aid.

Such tension could make it difficult for Congress to pass any farm-credit legislation before the Christmas holiday.

Administration officials have said they would assess the need for financial aid after Congress agreed to legislative changes requiring the system to undertake greater self-help efforts and accept tighter regulation.

Plans for such changes were included in the House bill, but Sethness listed nine administration objections to the proposals.

He argued that these differences should be worked out before debate begins on aid proposals.

Several congressmen asked Sethness why he thought there was a significant conflict between their plan to give the administration discretionary authority and its desire to study the aid question further.